Sticky Situations: The general counsel’s role in handling a board conflict.

By Alan Rudnick

Recently, I spoke with TheCorporateCounsel.net about the role of a general counsel or corporate secretary when a conflict arises on the board. This is a difficult situation for a GC/Sec as they might be put in a difficult or awkward position with the board or company management. You can listen to my full podcast with TheCorporateCounsel.net’s Broc Romanek on http://www.thecorporatecounsel.net/nonmember/InsideTrack/2013/03_12_Rudnick.htm. A few highlights about handling a board conflict:

• The GC/Sec must have a “dotted line” reporting responsibility to the board. The GC and Sec positions have duties to the corporation as a whole, and the board must be able to rely on those officers to do the right thing. Frankly, doing the right thing should not involve risking one’s job and career, and it’s up to the board to make sure the GC/Sec isn’t put in that position.

• When addressing a conflict, the GC/Sec must also always ensure that no laws were broken and whatever is necessary to report to the public is reported. It is pertinent that the GC/Sec is aware if a violation of ethic code occurs, that it is addressed and dealt with immediately.

• There are points in the board’s annual procedures where the general counsel or secretary can suggest steps to deal with conflict. The annual assessment and the annual board retreat both involve excellent opportunities to introduce processes that can help resolve contentious issues.

What are your thoughts or concerns about handling a board conflict?

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